A government-sponsored banking institution on Monday awarded more than $700,000 in subsidies to six affordable-housing projects in Orange County--the largest single infusion to date for local low-income projects. The funds from the Federal Home Loan Bank of San Francisco will help community organizations and savings and loans finance construction of 147 rental units and three detached homes.

After years of planning, work will begin next week on East Chapman Villas, an affordable-housing apartment project being built by a local developer and a nonprofit coalition. Interfaith Housing Development Corp. of Fullerton, a group comprising local churches and synagogues, and developer Douglas Chaffee are building the complex, which will be owned and operated by Interfaith. The 27-unit complex is expected to be completed in July.

"This is how we used to sell real estate in the '80s," said Mark Paolucci, the developer's ad man. Back then, eager buyers far outnumbered the houses for sale, and when their names were drawn, "they reacted as if they won the house." The downsized, '90s version occurred here Saturday when 16 "affordable" houses, part of the six-acre Montecito development, were raffled off to a pool of 30 families, some of whom had applied nearly a year ago.

A developer who is asking the city for a $1.7-million loan to build affordable housing for senior citizens has started negotiations with local officials. The City Council gave planners the go-ahead to start the meetings with KD Housing Partners of Laguna Beach earlier this week. But several members expressed concerns that the development would not move forward in time for the city to get state credit toward its affordable housing goals.

More than 2,000 units of affordable housing--ranging from single-room-occupancy hotels to apartments for senior citizens--have been built or scheduled for construction over the past two years, according to a new county report. Many of the units were financed at least in part with money from the U.S. Department of Housing and Urban Development and constructed in private-public partnerships, county officials said.

Residents opposed to an affordable-housing project in their neighborhood are asking the City Council to overturn the Planning Commission's approval earlier this month of the proposed 84-unit development. San Francisco-based Bridge Housing Corp. is planning the apartments on a four-acre lot at Santa Alicia and Santa Clara streets.

The Planning Commission approved a low-income housing project this week by a 3-2 vote, but neighbors said they will ask the City Council to overturn the decision. San Francisco-based Bridge Housing Corp. won approval to build 84 low-income apartments in eight buildings on a four-acre lot at Santa Alicia and Santa Clara streets. The company modified a previously rejected plan by incorporating all parking within the project.

After four years of planning, construction will begin this fall on a project to provide low-cost housing in Laguna Beach for people with the AIDS virus. A $715,000 federal grant, approved this week by the Santa Ana City Council, has removed the final major hurdle in transforming the former GTE building on Mermaid Street into a 25-unit apartment complex.

Willing to give up some land in return for affordable housing, the City Council this week began the procedure for relinquishing small portions of city-owned highway on Denni Street and Kathy Drive. A developer needs the land to start construction this fall on a long-planned affordable housing project for the city. "In order that the Olson Co.

Downey Savings & Loan Assn. said Monday that it has received three grants totaling about $100,000 to finance construction of affordable housing in Orange County. The thrift, which is based in Newport Beach, said it received the affordable housing grants from the Federal Home Loan Bank of San Francisco. The money will be used to help low-income families in Brea and Huntington Beach. "It's a great program and we're very glad to be involved," Downey Savings President Stephen W. Prough said.